G&NP Vocab #1

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Primary Government

A state government or general purpose local government. Also, a special purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments.

Reporting Entity

The primary government and all related component units, if any, combined in accordance, with GASB Codification Section 2100 constitute the governmental reporting entity.

Accountability

Being obliged to explain one’s actions, to justify what one does; the requirement for government to answer to its citizenry—to justify the raising of public resources and expenditure of those resources. Also, in the GASB’s view, the obligation to report whether the government operated within appropriate legal constraints; whether resources were used efficiently, economically, and effectively; whether current-year revenues were sufficient to pay for the services provided in the current year; and whether the burden for services previously provided will be shifted to future taxpayers.

General Fund

A fund used to account for all transactions of a government that are not accounted for in another fund. Note: the General Fund is used to account for the ordinary operations of a government that are financed from taxes and other general revenues.

Special Revenue Fund (SRFs)

Funds used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. After the fund is established, it usually continues year after year until discontinued or revised by proper legislative authority. An example is a motor fuel tax fund used to finance highway and road construction.

Permanent Fund (PFs)

Funds used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs—that is, for the benefit of the government or its citizenry. Permanent funds do not include private-purpose trust funds, which should be used to report situations in which the government is required to use the principal or earnings for the benefit of individuals, private organizations, or other governments.

Budgetary Accounts

Those accounts that reflect budgetary operations and condition, such as estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts.

General purpose governments

Governments that provide many categories of services to their residents, such as states, counties, municipalities, and townships. Typical services include public safety, road maintenance, and health and welfare.

Special purpose governments

Governments that provide only a single function or a limited number of functions, such as independent school districts and special districts. Formerly called limited purpose governments.

Fund

A fiscal and accounting entity with a self balancing set of accounts recording cash and other financial resources together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

Fund accounting

An accounting system organized on the basis of funds, each of which is considered a separate accounting entity. Accounting for the operations of each fund is accomplished with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Resources are allocated to and recorded in individual funds based upon purposes for which they are to be spent and the means by which spending activities are controlled. Fund accounting is used by states and local governments and internally by not-for-profit organizations that need to account for resources the use of which is restricted by donors or grantors.

Fiscal accountability

Current-period financial position and budgetary compliance reported in fund-type financial statements of governments.

Operational accountability

Information useful in assessing operating results and short- and long-term financial position and the cost of providing services from an economic perspective reported in entitywide financial statements.

Interperiod equity

A term coined by the Governmental Accounting Standards Board indicating the extent to which current-period revenues are adequate to pay for current-period services.

Expenditures

An expenditure is recorded when liabilities are incurred pursuant to authority given in an appropriation (q.v.). If the accounts are kept on the accrual basis (q.v.) or the modified accrual basis (q.v.), this term designates the cost of goods delivered or services rendered, whether paid or unpaid, including expenses, provision for debt retirement not reported as a liability of the fund from which retired and capital outlays. When the accounts are kept on the cash basis (q.v.), the term designates only actual cash disbursements for these purposes. Note: Encumbrances are not expenditures.

Expenses

A charge incurred, whether paid or unpaid for operation, maintenance, interest, and other charges presumed to benefit the current fiscal period.

Tax Anticipation Notes (TANs)

Notes (sometimes called warrants) issued in anticipation of collection of taxes usually retirable only from tax collections and frequently only from the proceeds of the tax levy whose collection they anticipate.

General Revenue

Revenues that are not directly linked to any specific function or do not produce a net revenue.

Program Revenue

Revenues linked to a specific function or program and reported separately from general revenues on the government-wide statement of activities.

Activity

A specific and distinguishable line of work performed by one or more organizational components of a government for the purpose of accomplishing a function for which the government is responsible. For example, food inspection is an activity performed in the discharge of the health function.

Object

A basis for distinguishing expenditures by the article purchased or the service obtained (as distinguished from the results obtained from expenditures). Examples are personal services, contractual services, materials, and supplies.

Program

Activities, operations, or organizational units grouped together because they share purposes or objectives.

Function

A group of related activities aimed at accomplishing a major service or regulatory responsibility for which a government is responsible. For example, public health is a function.

Character

A basis for distinguishing expenditures according to the periods they are presumed to benefit.

Allotments

A part of an appropriation (or, in federal usage, parts of an apportionment) that may be encumbered (obligated) or expended during an allotment period.

Discrete presentation

The method of reporting financial data of component units in a column(s) separate from the financial data of the primary government.

Component units

Separate governments, agencies, or not-for-profit corporations that, pursuant to the criteria in the GASB Codification, Section 2100, are combined with other component units to constitute the reporting entity (q.v.).

Economic resources measurement focus

Attention on measuring the total economic resources that flow in and out of the government rather than on measuring current financial resource only.

Current financial resources

Cash or items expected to be converted into cash during the current period or soon enough thereafter to pay current period liabilities.

measurement focus

The nature of the resources, claims against resources, and flows of resources that are measured and reported by a fund or other entity. for example, governmental funds currently measure and report available financial resources, whereas proprietary and fiduciary funds measure and report economic resources.

Appropriations

Authorizations granted by a legislative body to incur liabilities for the purposes specified in the Appropriation Act (q.v.). Note: An appropriation is usually limited in amount and as to the time when it may be expended.

Estimated revenue

For revenue accounts kept on an accrual basis (q.v.), this term designates the amount of revenue estimated to accrue during a given period regardless of whether or not it is all to be collected during the period. For revenue accounts kept on a cash basis (q.v.), the term designates the amount of revenue estimated to be collected during a given period. Under the modified accrual basis (q.v.), estimated revenues are those that are measurable and available.

Estimated other financing uses

Amounts of financial resources estimated to be disbursed or accrued during a period by a governmental or similar type fund for transfer to other funds.

Estimated other financing sources

Amounts of financial resources estimated to be received or accrued during a period by a governmental or similar type fund from interfund transfers or from the proceeds of noncurrent debt issuance.

Encumbrance

Accounts used to record the estimated amount of purchase orders, contracts, or salary commitments chargeable to an appropriation. The account is credited when goods or services are received and the actual expenditure of the appropriation is known.

Budgetary accounts

Those accounts that reflect budgetary operations and condition, such as estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts.

Other financing sources

An operating statement classification in which financial inflows other than revenues are reported, for example, proceeds of long-term debt and transfers in.

Other financing uses

An operating statement classification in which financial outflows other than expenditures are reported, for example, transfers out.

Exchange transaction

A transaction in which each party receives direct tangible benefits commensurate with the resources provided, for example, sales between a buyer and a seller.

nonexchange transaction

Transactions in which the donor derives no direct tangible benefits from the recipient agency, for example, a contribution to or support for a government or not-for-profit organization.

Interfund transfers

Amounts transferred from one fund to another.

Interfund loans

Loans made by one fund to another.

Accrual basis

The basis of accounting under which revenues are recorded when earned and expenditures (or expenses) are recorded as soon as they result in liabilities for benefits received, notwithstanding that the receipt of cash or the payment of cash may take place, in whole or in part, in another accounting period.

Modified accrual basis

Under the modified accrual basis of accounting, required for use by governmental funds (q.v.), revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred pursuant to appropriation authority.

Derived tax revenue

A classification on nonexchange transactions, such as income or sales taxes.

Imposed nonexchage revenue

A category of nonexchange revenue, such as property taxes and most fines and forfeitures.